Lean Six Sigma Methodology

The Lean Six Sigma methodology is a popular approach for improving the performance of many organizations. Combining many of the features of both lean manufacturing and Six Sigma, Lean Six Sigma was brought to the forefront in the early 2000’s. Six Sigma is focused on continually improving processes in order to maximize efficiency and minimize the number of defects that occur in any process. Lean manufacturing is a method of eliminating waste throughout the manufacturing process using a number of strategies and technique. The two have been combined to create a method that can help many different kinds of organizations optimize their performance.

Within Lean Six Sigma there are eight kinds of wastes that are identified. Below are basic definitions of what each of the eight wastes refers to, and how they are important in the big picture of the organization.

1) Defects

The impact that process defects can have on an organization should be obvious. When manufacturing a product, for example, each product that has a defect becomes a waste of resources. If an organization is able to limit those defects as much as possible, they will be left with a process that is more effective – and hopefully more profitable. Defects are a major point within Six Sigma, and the constant effort to improve processes is based around removing defects.

2) Overproduction

When an organization produces more than what they need, or they produce it too early, overproduction can become an issue. If too much of a given product is produced, the excess could be wasted and therefore should never have been produced in the first place. If the product is produced ahead of time, it will have used up resources that could have been allocated in a different manner for the time being. Also, when dealing with a physical good, products that are produced early will have to be stored, again taking up extra resources.

3) Waiting

Timing is very important in business. When working on a project, you want one step of the work to lead naturally into the next with no time wasted by people or machines. If you are spending money to have people available or machines ready that aren’t going to be used yet, there will again be a waste of resources. The more waiting that can be eliminated from a process, the more efficient it will be.

4) Non-utilized Talent

Making the most of the people that you have available is one of the biggest skills involved with being a good leader. Organizations that follow the Lean Six Sigma methodology will be focused on making the most of what they have in-house so that those people are being used to the best of their abilities. For example, if an employee who is already on the payroll has the skills and experience to complete a certain task, the organization may be able to save money by not having to hire a contractor to do the same work.

5) Transportation

Every inch that a product moves is going to cost the organization money in one way or another. Moving product can be one of the most-expensive activities for many businesses, so making sure that transportation is streamlined and optimized should stay near the top of the priority list. As the needs of customers change, the transportation process should constantly be reviewed and updated so that it keeps up with the time. Using an outdated transportation process is an easy way to spend more money than is necessary to get products or materials where they need to go.

6) Inventory

Holding products and materials in inventory when they aren’t needed also costs resources. The space that is taken up by that inventory could potentially be better used for another purpose, or it could be eliminated altogether so the cost of the space could be taken off the books. This is a key concept that comes out of the idea of Lean Manufacturing. Not having excess products on hand that aren’t needed will allow the organization to function more efficiently.

7) Motion

Just like products and materials shouldn’t be transported any more than necessary, people should also be optimized in terms of their movements. If a worker has to walk all the way from one end of the factory to the other to complete a certain task, only to return immediately back to where they started, all of that time is lost. Manufacturing processes should be designed in such a way that motion is limited so people can get more work done within a given amount of time.

8) Extra-Processing

All organizations want to do a good job and put out good products, but going too far can be just as damaging as not going far enough in terms of quality. The organization should be striving to deliver exactly what the customer has asked for, and paid for. When a company starts to over deliver the products that they have promised, a couple of problems can develop. First, the customer will have no motivation to pay for a higher quality product when they are already receiving one for a lower cost. Also, resources will be used toward creating this better product when they weren’t needed. This is another example of waste, and one that can be hard to spot because it might not seem like a problem at first.

Lean Six Sigma combines ideas and tools from two of the most popular methods in business – Lean Manufacturing and Six Sigma. The eight wastes above are a great way to understand what Lean Six Sigma is aimed at improving, but they are just the start of what is a vast subject. Educating yourself on Lean Six Sigma will give you an additional tool to help better make decisions and lead your own organization. Whether your company is formally employing the Lean Six Sigma method or you are just trying to expand your business operations knowledge, the concepts that are presented in this method are certainly worth understanding.

Key Points

  • Lean Six Sigma is a methodology that relies on a collaborative team effort to improve performance by systematically removing waste.
  • The eight kinds of waste are: defects, overproduction, waiting, non-utilized talent, transportation, inventory, motion, and extra-processing.
  • Lean Six Sigma emphasizes the use of methodologies and tools to identify and remove waste and increase process velocity, then follows with the use of Six Sigma methodologies and tools to identify and reduce or remove process variation.

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